Correlation Between Algonquin Power and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and GAMESTOP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Algonquin Power and GAMESTOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and GAMESTOP, you can compare the effects of market volatilities on Algonquin Power and GAMESTOP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Algonquin Power with a short position of GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and GAMESTOP.
Diversification Opportunities for Algonquin Power and GAMESTOP
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and GAMESTOP is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP and Algonquin Power is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Algonquin Power Utilities are associated (or correlated) with GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Algonquin Power i.e., Algonquin Power and GAMESTOP go up and down completely randomly.
Pair Corralation between Algonquin Power and GAMESTOP
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the GAMESTOP. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 2.46 times less risky than GAMESTOP. The stock trades about -0.08 of its potential returns per unit of risk. The GAMESTOP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,499 in GAMESTOP on September 14, 2024 and sell it today you would earn a total of 245.00 from holding GAMESTOP or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. GAMESTOP
Performance |
| Timeline |
| Algonquin Power Utilities |
| GAMESTOP |
Algonquin Power and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and GAMESTOP
The main advantage of trading using opposite Algonquin Power and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, GAMESTOP can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GAMESTOP will offset losses from the drop in GAMESTOP's long position.| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. SIVERS SEMICONDUCTORS AB | Algonquin Power vs. Norsk Hydro ASA | Algonquin Power vs. Reliance Steel Aluminum |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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